Oil and Gas
Africa loses $90bn annually to imported substandard fuel—Dangote
Africa is increasingly becoming a destination for cheap, often toxic petroleum products, many of which are blended to substandard levels that would not be permitted in Europe or North America. This concern was raised by the President/Chief Executive, Dangote Industries Limited, Aliko Dangote, during the ongoing West African Refined Fuel Conference held in Abuja. The event is organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity Insights. Dangote revealed that, due to the continent’s limited domestic refining capacity, Africa imports over 120 million tonnes of refined petroleum products annually, at a cost of approximately $90 billion. While appreciating the Management of the Nigerian National Petroleum Company Limited (NNPC), for making some cargoes of Nigerian crude available to us from start of production to date, he revealed that the company, monthly import between 9-10 million barrels of crude from the United States of America and other countries.
He said “as we speak today, we buy 9 – 10 million barrels of crude monthly from US and other countries. I must thank NNPC for making some cargoes of Nigerian crude available to us from start of production to date.” Dangote further stated that despite producing around 7 million barrels of crude oil per day, Africa only refines about 40% of its 4.3 million barrels daily consumption of refined products domestically. In stark contrast, Europe and Asia refine over 95% of what they consume. So, while we produce plenty of crude, we still import over 120 million tonnes of refined petroleum products each year, effectively exporting jobs and importing poverty into our continent. That’s a $90 billion market opportunity being captured by regions with surplus refining capacity. To put this in perspective: only about 15% of African countries have a GDP greater than $90 billion. We are effectively handing over an entire continent’s economic potential to others—year after year,” he said.
While reaffirming his belief in the power of free markets and international cooperation, Dangote emphasised that trade must be grounded in economic efficiency and comparative advantage — not at the expense of quality or safety standards. He stressed that, “it defies logic and economic sense for Africa to be exporting raw crude only to re-import refined products—products we are more than capable of producing ourselves, closer to both source and consumption.” Reflecting on the experience of delivering the world’s largest single-train refinery, Dangote also highlighted a range of challenges faced, including technical, commercial, and contextual hurdles unique to the African landscape.
Dangote described building refineries such as the Dangote Petroleum Refinery as one of the most capital-intensive and logistically complex industrial facilities ever constructed. The Dangote refinery project, he said, required clearing 2,735 hectares of land (seven times the size of Victoria Island), of which 70% was swampy, requiring the pumping of 65 million cubic metres of sand to stabilise the site and raise it by 1.5 metres, over 250,000 foundation piles, and millions of metres of piping, cabling, and electrical wiring among others. “At peak, we had over 67,000 people on-site of which 50,000 are Nigerians, coordinating around the clock across hundreds of disciplines and nationalities. Then, of course, came the COVID-19 pandemic which set us back by two years and brought new levels of complexity, disruption, and risk. But we persevered,” he noted.
The refinery also required the construction of a dedicated seaport, as existing Nigerian ports could not handle the size and volume of equipment required. This included over 2,500 pieces of heavy equipment, 330 cranes, and even the establishment of the world’s largest granite quarry, with a production capacity of 10 million tonnes per year. “In short, we didn’t just build a refinery—we built an entire industrial ecosystem from scratch,” he said.
Despite the refinery’s technical success, Dangote identified significant commercial challenges, particularly exchange rates which have gone from N156/$ at inception to N1,600/$ at completion, and challenges around crude oil sourcing. Although Nigeria is said to produce about 2 million barrels per day, the refinery has struggled to secure crude at competitive terms. “Rather than buying crude oil directly from Nigerian producers at competitive terms, we found ourselves having to negotiate with international trading companies, who were buying Nigerian crude and reselling it to us—with hefty premiums, of course. Logistics and regulatory bottlenecks have also taken a toll. Port and regulatory charges reportedly account for 40% of total freight costs, sometimes costing two-thirds as much as chartering the vessel itself.
“Refiners in India, who purchase crude oil from regions even farther away, enjoy lower freight costs than we do right here in West Africa because they are not saddled with exorbitant port charges,” Dangote said. He added that, in terms of port charges, it is currently more expensive to load a domestic cargo of petroleum products from the Dangote Refinery, as customers pay both at the point of loading and at the point of discharge. In contrast, when they load from Lomé, which competes with them, they pay only at the point of discharge. Dangote further criticised the lack of harmonised fuel standards across African nations, which creates artificial barriers for regional trade in refined products. “The fuel we produce for Nigeria cannot be sold in Cameroon or Ghana or Togo, even though we all drive the same vehicles. This lack of harmonisation benefits no one—except, of course, international traders, who thrive on arbitrage. For local refiners like us, it fragments the market and imposes unnecessary inefficiencies.”
Dangote, stating the challenge with diesel production in Africa, noted, “to give one example, the diesel cloud point for Nigeria is 4 degrees. Without going into the technical details, this means that the diesel should work at a temperature of 4 degrees centigrade. Achieving this comes at a cost to us and limits the types of crude we could process. But how many places in Nigeria experience temperatures of 4 degrees? Other African countries have a more reasonable range of 7 to 12 degrees. This is a low hanging fruit which could be addressed by the regulators.” He also cited the growing influx of discounted, low-quality fuel originating from Russia — blended with Russian crude under price caps and dumped in African markets. “And to make matters worse, we are now facing increasing dumping of cheap, often toxic, petroleum products—some of which are blended to substandard levels that would never be allowed in Europe or North America,” he said. Dangote called on African governments to follow the example of the United States, Canada, and the European Union, which have implemented protective measures for domestic refiners.
Oil prices were steady on Thursday, with the market focused on Ukraine’s attacks on Russian oil assets, while stalled peace talks tempered expectations of a deal restoring Russian oil flows. Brent crude rose 35 cents, or 0.6%, to $63.02 a barrel, while U.S. West Texas Intermediate rose 41 cents, or 0.7%, to $59.36. Ukraine hit the Druzhba oil pipeline in Russia’s central Tambov region, a Ukrainian military intelligence source said on Wednesday, the fifth attack on the pipeline that sends Russian oil to Hungary and Slovakia.
The pipeline operator and Hungary’s oil and gas company later said supplies were moving through the pipeline as normal. “Ukraine’s drone campaign against Russian refining infrastructure has shifted into a more sustained and strategically coordinated phase,” consultancy Kpler said in a research report.
This has pushed Russian refining throughput down to around 5 million barrels per day between September and November, a 335,000 bpd year-on-year decline, with gasoline hit hardest and gasoil output also materially weaker,” the report added. The perception that progress on a peace plan for Ukraine was stalling also supported prices, after U.S. President Donald Trump’s representatives emerged from peace talks with the Kremlin with no specific breakthroughs on ending the war.
“War and politics, balanced against comfortable stocks, expected supply surplus, and OPEC’s market-share strategy, keep Brent in the $60–$70 range for now,” said PVM analysts. Previously, expectations of an end to the war had pressured prices lower, as traders anticipated a deal would allow Russian oil back into an already oversupplied global market.
Meanwhile, U.S. crude and fuel inventories rose last week as refining activity picked up, the Energy Information Administration said on Wednesday. Crude inventories rose by 574,000 barrels to 427.5 million barrels in the week ended November 28, the EIA said, compared with analysts’ expectations in a Reuters poll for an 821,000-barrel draw.
Fitch Ratings on Thursday cut its 2025-2027 oil price assumptions to reflect market oversupply and production growth that is expected to outstrip demand.
Oil and Gas
Army destroys seven illegal oil refining sites, arrest 4, recover 109,000 ltrs of stolen products
Soldiers from the 6 Division, Nigerian Army, Port Harcourt, Rivers State, have destroyed seven illegal crude oil refining sites in its sustained efforts in the Niger Delta Region. The soldiers during the operation arrested four suspects and recovered 109,000 liters of stolen petroleum products. Lieutenant Colonel Jonah Danjuma, Acting Deputy Director, 6 Division Army Public Relations, in a statement in Port Harcourt, said success was in a sustained operation against oil theft. Danjuma said: “In the latest operations conducted with other security agencies between 10 and 23 November 2025, several illegal refining sites were taken out, four suspected oil thieves were arrested with over 109,000 litres of stolen products recovered across the NDR. “These include over 88,000 litres of stolen crude oil and 21,355 litres of illegally refined Automotive Gasoline Oil (AGO). The total cost of the products recovered amounted to over One Hundred and Fifty Million Naira only.”
Danjuma disclosed that the operations were conducted in Rivers, Akwa Ibom and Delta State. He said: “Operations conducted in Rivers State around Okolomade in Ahoada West Local Government Area (LGA) led to the deactivation of three illegal refining sites, three big pots, four big receivers and three big coolants, with over 40,000 litres of stolen crude and 20,000 litres of illegally refined AGO recovered. At the fringes of the Imo River, troops discovered three illegal refining sites, eight drum pots, seven drum receivers, one fibre boat and over 14,700 litres of stolen crude around Asa, Obeakpo, Lekuma and Abiama in Oyigbo LGA”.
He said “Relatedly, following credible intelligence, troops stormed a compound at Abuloma in Okrika LGA, where they discovered about 1,050 sacks filled with over 32,000 litres of stolen crude. At Abonnema Creek in Akuku-Toru LGA, troops intercepted a Cotonou boat loaded with 25 sacks filled with over 1,000 litres of illegally refined AGO. Also, in Akwa Ibom State, troops conducted a raid on a suspected storage facility at Ikot Akpan, Ekparakwa along the Abak–Ikot Abasi road in Abak LGA. During the operations, over 520 litres of illegally refined AGO stored in a drum and ten jerricans, as well as several empty jerricans, were recovered.
In Delta State, troops conducted an operation at DAEWOO yard within Ekpan area in Uvwie LGA. On sighting troops, the suspected oil thieves fled into nearby creeks with wooden boats loaded with jerricans. Troops also discovered three 25-litre jerricans filled with 75 litres of crude oil. Meanwhile, in Bayelsa State, troops have continued to deny criminal elements freedom of action.” The General Officer Commanding (GOC), 6 Division, Nigerian Army, Major General Emmanuel Emekah, who commended the troops for their resilience charged them to sustain the tempo in ensuring that economic saboteurs are effectively denied freedom of action in the NDR.
Nigerian National Petroleum Company Limited (NNPC Ltd) has announced that it recorded a Profit After Tax of N5.4 trillion from total revenue of N45.1 trillion for the full year ended 2024. This is contained in a statement signed by the company’s Chief Corporate Communications Officer, Andy Odeh, on Monday. According to the statement, “The results, shared during its earnings call with analysts, underscore a year of strong operational delivery.” Odeh also said the Company unveiled its strategic roadmap to drive sustained growth and support Nigeria’s energy transition through 2030.
“The plan prioritises increased oil and gas production and outlines a $60 billion investment pipeline across the energy value chain,” NNPC Ltd stated. NNPC Ltd’s results, the statement said, highlight a surge in revenues and profits, signalling improved cost discipline, enhanced asset performance, and growing operational stability. NNPC according to the financials made a revenue of N45.1 trillion representing 88 per cent year-on-year growth. It said that Profit After Tax was N5.4 trillion, 64 per cent year-on-year growth; earnings per share stood at N27.07, 64 per cent year-on-year growth
Bashir Bayo Ojulari, Group Chief Executive Officer of NNPC said “the earnings highlight the positive momentum of our ongoing transformation and the unwavering commitment of our workforce,” said. “They offer a solid foundation for the ambitious growth ahead, in line with President Bola Ahmed Tinubu’s mandate, and reaffirm our commitment to delivering value to Nigerians.”
NNPC Limited, the statement said, is accelerating investments across upstream operations, gas infrastructure, and clean energy to extend growth into the next decade. Key strategic targets include: increasing crude oil production to 2 million barrels per day (bpd) by 2027 and 3 million bpd by 2030; growing natural gas production to 10 bcf/d by 2027 and 12 bcf/d by 2030 and completing major gas infrastructure projects such as Ajaokuta-Kaduna-Kano (AKK), Escravos-Lagos Pipeline System (ELPS) and Obiafu-Obrikom-Oben (OB3) pipelines to strengthen domestic supply and regional integration and Mobilising $60 billion in investments across the upstream, midstream, and downstream sectors by 2030.
“Our transformation is anchored on transparency, innovation, and disciplined growth,” Ojulari added. “We are positioning NNPC Limited as a globally competitive energy company capable of delivering sustainable returns while powering the future of Nigeria and Africa.”
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